Initial data from the Energy Information Administration (EIA) indicates that US oil production last year was at its second-highest level on record.
While it will still be some time before the IEA reports its final figures for the latter months of 2022, the EIA’s four-week averages can be used to fill the gap and derive an interim yearly estimate of just under 12 million barrels per day (bpd).
The record remains with 2019, when oil production averaged 12.3 million bpd in the last full year to proceed the COVID-19 pandemic and the associated restrictions. With oil prices declining and even briefly turning negative, many US oil operators pared back their production and capital investment, resulting in average US monthly production declining from 12.9 million bpd just before the market disruption began to 9.7 million bpd in May 2020.
Since then, many US operators—such as ExxonMobil and Chevron, the producers of Mobil and Texaco products like hydraulic oil—have invested in rebuilding their capacity, especially in the Permian Basin of Texas and New Mexico. According to Baker Hughes, there were 620 drilling rigs active in the US at the end of last year, not far behind the level just before the pandemic.
This all means the US is potentially poised to set a new record this year for crude oil production, which could be helpful given that the global supply of oil has been heavily affected by Russia’s invasion of Ukraine. Nevertheless, further increases are expected to be more gradual than they were in pre-pandemic times.